Enter the current annual earnings, expected annual earnings without injury, and the number of years affected into the calculator to determine the loss of earning capacity.
Loss of Earning Capacity Formula
The following formula is used to calculate the loss of earning capacity.
LEC = (EE - CE) * YA
Variables:
- LEC is the loss of earning capacity ($)
- EE is the expected annual earnings without injury ($)
- CE is the current annual earnings ($)
- YA is the number of years affected
To calculate the loss of earning capacity, subtract the current annual earnings from the expected annual earnings without injury and then multiply by the number of years affected.
What is Loss of Earning Capacity?
Loss of earning capacity is a legal term that refers to the reduction in an individual's ability to earn income due to a disability or injury. It is a measure of the future income that the individual is estimated to lose because of the injury. This calculation is often used in legal cases to determine the amount of compensation an injured party should receive.
How to Calculate Loss of Earning Capacity?
The following steps outline how to calculate the Loss of Earning Capacity.
- First, determine the expected annual earnings without injury (EE) in dollars.
- Next, determine the current annual earnings (CE) in dollars.
- Next, determine the number of years affected (YA).
- Next, gather the formula from above = LEC = (EE - CE) * YA.
- Finally, calculate the Loss of Earning Capacity (LEC) in dollars.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
expected annual earnings without injury (EE) = $75,000
current annual earnings (CE) = $50,000
number of years affected (YA) = 10 years